Spy agency oversight bill sends chill up telco spines

Spy agency oversight bill sends chill up telco
spines

By Paul McBeth

June 26 (BusinessDesk) - New
Zealand’s telecommunications companies are confident their
network security regimes are robust and are concerned
introducing expanded oversight by the country’s
foreign-facing spy agency will create new commercial risks.

Network operator Chorus and telecommunication service
firms Telecom and Vodafone New Zealand all raised objections
to the expanded role granted to the Government
Communications Security Bureau in oral submissions on the
Telecommunications (Interception Capability and Security)
Bill.

The proposed legislation obliges network operators
to grant greater access to surveillance agencies including
the GCSB, Security Intelligence Service and police,
something all three companies said was unnecessary and could
pose regulatory risks to their businesses.

“We don’t
agree that statutory powers for GCSB to require additional
security are necessary or in the public interest,” Airihi
Mahuika, principal counsel, regulatory and competition at
Chorus, told Parliament’s law and order select committee.
“The current proposals could require significant
investment, delays in procurement processes, impact on
commercial interest, contractual obligations and potentially
stifle innovation.”

Because GCSB had incentives to focus
on security risks without bearing any cost, it wouldn’t be
under the same urgency a private company was, she said.

All three telecommunications companies sought a strict
timeframe for GCSB to respond in their interactions with
network operators to be included in the legislation, to
ensure any delays were minimised and didn’t affect
investment.

The bill aims to set out the obligations on
telecommunications companies to offer interception
capabilities on their networks to surveillance units, and
oblige them to engage with those agencies about potential
risks to the country’s national security or economic
well-being when building and running their networks.

Among others to appear before the committee, Jason
McHerron of the New Zealand Law Society said the definitions
of security risk was too broad, and had wide implications by
including any potential risk to the country’s well-being.

“It brings to mind some sort of central planning of
telecommunications by what is effectively a spy agency,”
McHerron said. “The Law Society does have some questions
about how well-equipped the GCSB is to carry out that
role.”

John Wesley-Smith, Telecom general manager of
regulatory and industry affairs, also took issue with the
proposal granting ministerial direction where a significant
risk to national security is raised, and said if it’s ever
exercised the phone company would want half of its costs
covered.

Chris Abbot, head of public policy at Vodafone,
opposed the proposed exemption for small network operators,
saying it would create incentives for people to circumvent
obligations at the major companies.

The three major
telecommunications firms were also adamant the initial
exemption of companies which sell their services without
owning a network, known as over-the-top service providers,
created a major gap, and undermined the intent of the
legislation with more information being relayed via these
avenues.

Vikram Kumar, chief executive of Kim Dotcom’s
Mega, criticised the lack of consultation with over-the-top
service providers, and said the proposal to impose blanket
interception capabilities on service companies would deter
them from setting up in New Zealand.

“The competitive
position of New Zealand will be significantly weakened if
this bill passes in its current form,” he said. “We’re
disappointed that no evidence has been provided whatsoever
on the need for this law, particularly in relation to
service providers.”

The Wellington-based BusinessDesk team led by former Bloomberg Asian top editor Jonathan Underhill and Qantas Award-winning journalist and commentator Pattrick Smellie provides a daily news feed for a serious business audience.

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